Global hedge fund assets dropped below $3 trillion again – to $2.99 trillion – as investors withdrew $20.7 billion from the industry, according to the June eVestment Hedge Fund Asset Flows report, which highlights figures from June, 2Q and the first half of the year.

With some exceptions, this was not a good month, quarter, nor first half for the industry. June redemptions were the largest June since eVestment began tracking monthly flows in 2009.

Given that redemption notices tend to be a minimum of one month (shorter for macro/managed futures, longer for event driven), it is unlikely the industry’s June/Q2/H1 flows were materially impacted by the recent BREXIT vote, so asset flows trends related to that event are still a tale to be told.

Some other interesting points from the new report include:

·         Commodity fund flows were positive again in June, the ninth month of inflows in the last 10. Performance for the universe was strong in June, which should keep investor sentiment positive for some time going forward.

·         Long/short equity strategies had the largest aggregate redemptions in June. Performance declines in H1 are likely the primary reason for the elevated outflows. The 10 long/short equity funds with the largest outflows in June returned an average of -6.13% in Q1, and -8.27% YTD. Conversely, the 10 funds with the largest inflows in June returned an average of +4.55% in 2016.

·         Multi-strategy hedge funds, which tend to have redemption notice requirements of 45 days or more, had their largest monthly outflows since December 2014 and second largest since December 2012.

·         Aggregate macro hedge fund flows shifted back to negative again in June after a two-month reprieve.

·         Event driven funds continue to see assets removed. Net outflows of $2.97 billion in June resulted in $6.73 billion removed in Q2 and $27.06 billion removed in 2016. The largest redemptions during the year have been from big funds that underperformed last year.

·         For the second consecutive month, funds domiciled in Europe experienced elevated redemption pressure. Also for the second consecutive month, the majority of redemptions came from firms located in the UK and from within long/short equity and large managed futures funds.

·         Asia-domiciled funds are in the midst of the worst redemption pressures since mid-2011. Investor flows have been negative for seven consecutive months, and for nine of the last 10 months. In this span, investors have removed an estimated $6.1 billion, the equivalent of a 10% decline in the region’s business due to investor redemptions.

To download a full copy of the report, please click here.